Project Summary Form
Project Title: Sector Syndication Prospectuses for 2 Countries
Project ID (if available):
Region/Country: SubSaharan Africa
Task Manager: Rob Mills
ESMAP Thematic Area (M – Main; S – Secondary (if applicable)):
Energy Security S
Energy Markets S
Energy Poverty M
It is well recognized that the current poor performance of the power sector in many SSA countries is
due in part to suboptimal sector investment planning, insufficient commitment of government
resources that have led to massive underinvestment in the sector. In addition, poor governance
standards have resulted in low levels of private sector investment as well as overpriced and
inappropriate investments and mismanaged utilities have neglected to rehabilitate and upgrade
networks. In all of this, donors’ responses tend to be adhoc and uncoordinated, based on a project
byproject approach that reflects donor priorities rather than country needs.
The Action Plan for Energy Access in SSA proposes to coordinate closely with the donor community
to implement a sectorwide programmatic (SWP) approach in SSA countries where the policy
framework is favorable. The Bank is working to operationalize the strategy in a few pilot countries
through preparation of a mediumterm investment plans for the electricity sector and mobilization of
donor and private sector financing. The Bank will take the lead in preparing these SWPs for two
countries by December ’07 and will advocate development partners take similar lead roles in several
other countries. The SWP prospectus that will be prepared will set out: projects and subprojects
requiring financing; policies on which the government commits to implement; and targets and
outcomes sought for household, public facilities and enterprise access and service level.. The
approach provides a practical programmatic way of harnessing donor assistance to finance a credible,
longer term countryled program for access expansion along all five tracks. Once the countries
prepare and place the sector syndications on offer, donors, private sector and other financiers will
choose what they can finance and over what time period. It will provide a flexible format for
participation by donors and investors, since:
(i) It sets out a single platform for attaining a country’s energy objectives on which all donors and
investors can coordinate their assistance. This represents a move away from an ad hoc donorby
donor and projectbyproject approach.
(ii) It enables the sponsor (the country) to set out clearly its policy and fiscal commitments to the
sector in a transparent, comprehensive way.
(iii) It offers donors and investors significant flexibility in their investment commitments. Some
may choose to (co)lead the entire syndication prospectus in some countries, while being a more
passive financier in others. Others may choose to specialize on just one track of the Action Plan
in a range of countries, allowing others to work on other tracks.
(iv) The pooled funding that results from a syndicated approach allows for more predictable
investment flows, as variation in any single participant’s available funding could be balanced out
Project Summary Form
The approach has been extensively discussed with the donor community during September –
December ’06 and has met with broad approval.
The present proposal is to develop Sector Syndication Prospectuses for Senegal and Zambia by
December ’07 (Please note that the choice of countries is base on consultation with counterparts who
have great interest. However the study has certain risks (political and macroeconomic) that may
derail the study in one or other country. If this were to happen AFTEG would refocus the work on
The sector syndication approach will be founded on these countries strategic plans for their energy
sectors. The strategic plans will include: clearly stated longterm objectives and corresponding
measurable and timebound targets; the specific infrastructure outputs; estimated investment
requirements; an assessment of policy, implementation capacity and institutional reforms in the
energy sector that will be needed to reach the objectives; as well as proposed actions to remedy any
The sector syndication prospectus is the document that translates the strategic planning exercise into a
series of carefullycosted and actionable projects or activities that are to be invested in or funded by
external actors. The government as the stakeholder primarily responsible for planning and executing
these projects is the ‘sponsor’ of the prospectus.
The building blocks for the sector syndication prospectuses are along three key dimensions.
1. Investment Requirements:
Detailed and realistic estimates of investment needed for each of the tracks to be featured in
the syndication. This will involve integrating two pieces of analytical work: (a) GIS based
costings produced by Earth Institute studies (already commissioned in FY06) (b) the
investment program for transmission and generation and interconnection related investment
from existing country and regional system expansion studies.
The prospectus will also need to set out nonfinancial inputs that will need to accompany
investment flows in order to reach the objectives. These might include technical assistance
and project preparation funding.
2. The Financing Plan:
The prospectus will set out how the project investment needs will be met, including funding
already committed by the government, an estimation of the size of the remaining financing
gap and anticipated steps to close it.
The prospectus sets out the level of financing that will be committed from the sponsor’s own
resources, as well as anticipated revenue flows from endusers. The financial analysis
includes projections of the costs, revenues, tariffs, utility performance and the sector overall.
Five tracks of the Action Plan for Energy Access in SSA: 1) Increase coverage for enterprises & households via
electrification programs; 2) Enhance generation capacity, including via regional projects; 3) Provision of energy
services for key public facilities such as schools and clinics; 4) Equip unconnected households with affordable,
modern lighting; 5) Clean & sustainable cooking & heating technologies and fuels.
Project Summary Form
It indicates the financing requirements given a specified level of tariffs, technical
performance indicator, internal cash generation, and other transfers.
The prospectus will set out the level of financing that will be committed by other donors and
the private sector. Donors may also contribute capacitybuilding or other technical inputs.
3. The Policy and Institutional Framework:
The prospectus will describe the policies and institutional arrangements in place (and to be in
place) in order to underwrite the development of the sector. These will include the pursuit of
specific technologies, cost reflective tariffs and regulation e.g. a fiveyear tariff regime and
automatic adjustments, subsidization policies and protection for the poor, incentives for
specific investments etc.
The prospectus will also set out the roles and responsibilities of various public and private
sector stakeholders/institutions in the sector and governance arrangements to ensure
accountability and oversight. For example, in Kenya the utility will be managed through a
management contract during the syndication period.
To ensure the integrity of the syndication process and to minimize the risks of achieving the
objectives, the prospectus will also set out how the Government intends to manage the public
and private sector interface, the modalities governing the selection of sponsors and investors
and measures for economic and efficient decision making.
Prospectus Summary Document
This summary document will present and justify the financing gap associated with a credible,
coordinated and comprehensive sector program defined by targets and outcomes sought along
each track covered, readiness of country, what is the country's portion of the compact in
terms of delivering increases in efficiency, performance etc technical, financial, regulatory,
institutional etc and a proposal for financing the gap along the tracks.
Outputs and Outcomes
The output of the work as noted above will be a prospectus whose intended audience are potential
investors and development partners. The prospectus will undergo peer review by seasoned World
Bank and IFC staff in a QERlike process. The outcome if successful will be additional funding
support for access. Experience with the approach in the pilot countries will be the basis for a lessons
PCN Review February19, 2007
Final delivery to client Country 1 Prospectus: January 31, 2008
Country 2 Prospectuses: June, 2008
Yes? Delivery date
Project Summary Form
Formal AAA Report EW: Output Type Country 1 Prospectus:
Policy/Investment January 31, 2008
Note Country 2 Prospectuses: June,
Informal AAA product (e.g., policy note) –
Note on product classification using OPC guidelines
The activity involves original analytical effort. The primary intention is to influence the client’s investment
programs for energy access. AFTEG will endorse the recommendations that will be conveyed to clients. The output
is a study outlining policy recommendations. For recording create EW activity with POL as output type.